Government outsourcing of prisons, policing support and other key security services is a key driver of not only market growth but also supplier consolidation and convergence with FM
London (PRWEB UK) 3 December 2012
This newly-published market report by Apex Insight on the outsourced security guarding industry finds that the UK market is approaching £5bn in size, having grown in recent years despite the recession. A few key areas, such as retail, airports and government contracts, have driven this growth. This follows from the increased emphasis on airport security in the post-9/11 world and outsourcing of contracts for public sector services such as operation of prisons and border control
It is interesting to note that the increased spending on security has not been driven by actual levels of crime, which have fallen steadily over the last couple of decades. However, public perception and fear of crime have not fallen. Demands for tougher sentences are widespread and prison populations have increased with the UK incarcerating a higher percentage of its population than most other European countries.
Deployment of new security technology, such as CCTV, has been both as a complement to and a substitute for, human guards. In some cases it has enabled customers to reduce the amount they spend on security.
Another recent trend has been convergence between security and facilities management. Several of the leading players in the industry, such as G4S, MITIE, Compass, Serco and Sodexo, provide security as part of a broader range of services. For Integrated FM companies the logic is compelling: incremental revenues from cross-selling of security can increase revenue per customer and hence drive profitability. Benefits for customers are debated: while integration of local management at smaller sites is frequently reported as a saving, there are few reports of significant operational reengineering to remove costs by integrating security and other services on the ground. Furthermore, any savings need to be weighed against potential risks from using a non-specialist in what can be a sensitive area.
Some leading providers, such as Securitas, Corps and Shield, continue to focus exclusively on security as a standalone service and evidence is that many of the companies offering a range of services tend to have separate security contracts – other than for the UK public sector where procurement approaches such as PFI have encouraged the trend towards bundling.
While the core manned security market is somewhat mature, growth is likely to come from increased outsourcing of government services such as the operation of prisons and provision of a range of policing services. In addition, airports are likely to remain a key source of growth. Economic recovery is likely to accelerate passenger growth and new technologies, such as body scanners, are constantly being developed and deployed.
The market remains relatively fragmented. In our research we analyse the performance of 17 of the largest UK security service providers, which account for 75% of the market. We note that margins have held up very well for most of these operators with price increases being achieved despite the economic downturn and wage inflation being kept in check. The remainder of the market is served by a long tail of smaller providers with the industry accreditation body, the SIA, having over 700 members. The nature of growth, with the most attractive opportunities appearing to be in areas where there are large contracts, implies further market consolidation in the future.
The full market report: “Outsourced Security Guarding Services: UK market profile and forecasts” is available from http://www.apex-insight.com/research
Notes for editors
Apex Insight is an independent provider of research, analysis and consulting services covering business services markets in the UK and Europe.
In addition to Security, it has published market reports during 2012 covering sectors including Integrated Facilities Management, Contract Catering, Pest Control, Outsourced Call Centres, Waste Management, Tool & Equipment Hire, Express Parcels and Vehicle Leasing.
Companies profiled in the report
MITIE Total Security Management
Securitas Security Service (UK)
Vision Security Group
Advance Security UK
Corps of Commissionaires Management
The Shield Guarding Company
TSS Total Security Services
Ultimate Security Services
Axis Security Service
First Security (Guards)
Carlisle Security Services
CIS Security Services